Alcatel And Thomson Create Home Networking/Internet Connectivity Company

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Thomson Multimedia and European data communications firm Alcatel announced the formation of a new company that will develop and sell Internet connectivity and home networking products.

Ownership of the as yet unnamed company will be evenly split between Thomson and Alcatel. It is expected to be operating by the fourth quarter of 1999. The new company is expected to generate $800 million in annual revenue. The operation will manufacture its own products, but will lean on its parent organizations for technical and mass-marketing expertise.

Mike O'Hara, Thomson's VP of worldwide multimedia products, said 65 percent of the company's sales will go through retail distribution with the remaining 35 percent sold through telecommunications companies. The upcoming products will sell under the RCA and GE brand names in North America and Alcatel in Europe. Sixty percent of the company's sales are expected to take place in the United States with 30 percent in Europe and 10 percent in other markets.

The company will ship new products in three waves. The first will feature home telephony products like cordless phones and analog modems. The next generation merchandise will include DSL and cable modems, Internet screen phones and Internet Web stations. Tentative plans have DSL modems with data transfer speeds of 570KB to 4MB available in 2001 and cable modems speeds of 900KB to 3MB coming out next year. Company executives also discussed Internet appliance products with data speeds of 10MB by 2002.

The last area of interest is home networking products like home computer servers; home, personal and wireless LAN devices; and Internet gateway products.


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